Small game developers woes: after holiday sales, cost of game production

With the arrival of next generation consoles in the gaming market, players have been feasting their senses on high quality graphics, surround sound, and engaging gameplay.

On the other hand, developers just grit their teeth and labor on as inflation sends costs of next-gen game production costs sky rocketing. More details regarding this after the jump.

With the onset of game titles for next generation consoles such as Sony‘s Playstation 3, Microsoft‘s Xbox 360, and Nintendo’s Wii, modern day gamers now enjoy the quality graphics, sound, and gameplay these games have to offer.

But developers, significantly smaller gaming outfits, are starting to feel the sting of inflation as the cost of producing games to meet current standards rise to startling heights. Such is the concern that many companies fear for their uncertain future after the holidays.

According to Blitz Games Chief Executive Philip Oliver, the problem of the sharp rise of costs of next-gen console game production lies on the complexity of developing games nowadays and the trend of high-definition video gaming. Because of these factors, companies opt to increase man power that leads to more costs.

Due to this, companies now look to other means such as outsourcing to fund game development . But even after companies make such adjustments to address inflation, the problem is still felt by everyone as the cost to produce games has tripled in recent years with the proliferation of next-gen consoles.

And even with the success of next-gen console sales, sales and revenue have hardly seen any change for developers. With profit margins offering little breathing space, many companies bank on increased sales during Christmas to win back revenues.

But with no one knowing exactly how games will fare before the year ends, companies are still holding their breath. In fact, European Games Developer Federation (EGDF) Fred Hasson says that game companies will lay as possible casualties after Christmas.